Behind the Times - I learn about Keep the Change

I tend to ignore most promotions that banks send my way. I use Bank of America for my primary checking account, and they often interrupt my online banking log-in to try to sell me on some kind of promotion.

So it was with Keep the Change — I just assumed that it was another little gimmick that wasn’t worth a second glance, and I would sigh heavily whenever the advertisement prevented me from immediately seeing my account balance when I logged into my online checking account. It wasn’t until a friend told me that she was participating that I started to pay attention.

Bank of America's Keep the Change program works like an electronic version of a change jar. You know how you hear that when you pay cash for something, if you ALWAYS put your leftover change in a jar, at the end of a year, you’ll have several hundred dollars saved up? That’s true if you are the cash-paying type — I’m not, although that may change over time. I tend to use my debit card for everything. And this is where Keep the Change comes in.

Keep the Change pretty much works like a change jar. When time you pay for something with your B of A debit card, Bank of America will round the total up to the next dollar (no matter what the amount) and deposit the difference in your savings account daily. So, if your morning latte comes to $3.13, an extra $0.87 is taken from your checking and deposited into your savings account.

So, initially, they take extra money out of your checking account and deposit it into savings. This isn’t really revolutionary, but it’s not a bad idea. If you’re already a Bank of America customer, you should consider it.

Pros

Earn as much as you can by tipping. When I go out to eat (every night), I add my tip so that my total comes to exactly one cent over a whole dollar amount — $29.01, for example. That way, Bank of America will save $0.99 for me.

You can still access the money (although this sort of defeats the purpose of saving the money, and you won’t earn as much interest as if you left it there, but in a pinch, you can grab those funds).

Cons

If you overdraw your account for a day, Bank of America will not round up to the nearest dollar amount and the Keep the Change transfer will be cancelled.

I don’t think it’s really worth it to open a checking and savings account with Bank of America if you don’t already have one.

You only make a good deal of money on this if you spend like I do, on tons of little items, many times a day.

I've been enrolled in Keep the Change for a little over a month, and I've set aside a little over $70. Hey, it's not a lot, but it's a manicure and pedicure, right there.

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You're not the only person who ignores promotional offers. I've heard about this program (how can you not, their advertising is everywhere) for a while now but never tried it because I just don't trust most promotions. But I do trust you Andrea, so I'm going to give it a shot. Can't ignore $250! That's at least one trip to the bar.

I believe my words were "unhealthy and unnatural mental-sexual dependence upon". I don't think I ever said "fetish".

I kid you not, though. Cutest shoes ever. I had been really disappointed in Target's hooker heels that seemed to dominate the Seattle area market for the past five or six months, but the Spring collection is coming in and, DAMN. I'm in love.

Keep the Change is only a win during the promotional period over a rewards credit card. Take a purchase of say $5.01. During the promotional period KtC gives you 99cents, a 1% cash back CC gives you 5 cents. Outside the promotional period KtC also gives you 5 cents.

Given that the example is probably overly favorable to KtC (most purchases are probably more than $5 and the average KtC bonus will be closer to 5% of 50 cents or 2.5 cents) I would use a rewards CC when possible after the inital period.

Thank you, guest. I agree that a credit card with rewards would be even better. But alas, I cut up all of my credit cards a few years ago and am working on paying off the balance through credit consolidation. So, for those of us who have given up the credit, this is a nice little option.

Yeah, I totally said that Keep the Change was the best thing in the entire world and that everyone should sign up and that Bank of America is totally awesome and that the program is better than credit card reward programs. That's exactly what I said. I'm glad you were able to see through the lies and speak truth to power.

You know what? Giving up coffee isn't nearly as fun as every said it would be. I apologize, Brendan. I'm just a little short on, you know, patience and understanding right now.

I agree that there are better promotional money-back programs out there. I didn't mean to imply that B of A was doing anything remarkable or altruistic. I'm just saying that for B of A customers who don't usually sign up for B of A promos, this one might be worth it. Especially for people WHO DON'T USE CREDIT CARDS BECAUSE THEY HAVE F'ED UP CREDIT BUT USE THEIR DEBIT CARDS A LOT.

The good think about quitting coffee, however, is that I can start drinking whiskey much eariler in the day.

Thanks for your funny and useful post Andrea. My husband and I enrolled in KtC in 2005 and received our first match in Nov. 2006 ($50+). Though I agree with Brendan that there are other ways to "earn" rewards/cash when spending, I think that the "forced savings" that KtC offers may help some peple develop a habit of saving which many Americans are loathe to do (See an interesting article about saving on Investment News.)

Thanks for sharing your experience. I've been a BoA customer for years now and I have noticed this program, but like you I never gave it a thought. And mostly because I didn't hear or read about anyone else using it. So thanks for sharing your thoughts, and the pros and cons.

My wife and I have used the Keep The Change program since its inception...and we LOVE it!! There are NO fees for the automatic transfer that B of A does from Checking -> Savings with this program. Last year, we saved over $650 using this program (we average about $40-$60 per month). Our 100% match for the first 3 months when we got it was over $125!! As you can tell, we use our debit card A LOT!! I think this was a REALLY good idea from B of A. Use the program correctly, and you can save HUNDREDS of dollars EVERY year without even doing anything (although we do "dip" into the savings every now and then when we need to)!!

We have other accounts from other banks that we use quite often, but we use these accounts for the "everyday" things we buy when we use our debit card most often.

It's really not a bad program if you use it correctly. Now if they could offer higher savings rates...they would have a hard-to-beat combination...

Remember - you are in effect transferring your own money from your checking account into a savings account. Now, note the interest rate of the checking account and the savings account. The savings account rate currently (Nov. 2007) is .23%. And the checking rate is .25%. Those rates are ridiculously low. They can afford to pay you a matching amount for the first few months to get you tied to the program, because you are earning nothing on you money. (My A.G. Edwards Ultra Asset Account pays me 4.25% and I have checkwriting and a debit card.

The reason BAC is doing this is because studies show that when customers have three accounts at one location , they are less likely to move their accounts. This is all about business. They are not focused on trying to help you save. They are trying to make money for the bank. (Last year the bank earned about $40 Billion in fees.)

Remember - you are in effect transferring your own money from your checking account into a savings account. Now, note the interest rate of the checking account and the savings account. The savings account rate currently (Nov. 2007) is .23%. And the checking rate is .25%. Those rates are ridiculously low. They can afford to pay you a matching amount for the first few months to get you tied to the program, because you are earning nothing on you money. (My A.G. Edwards Ultra Asset Account pays me 4.25% and I have checkwriting and a debit card.

The reason BAC is doing this is because studies show that when customers have three accounts at one location , they are less likely to move their accounts. This is all about business. They are not focused on trying to help you save. They are trying to make money for the bank. (Last year the bank earned about $40 Billion in fees.)

I have been using Keep the Change for almost a year now and am finding I have lost money in the long run.

My socioeconomic status is that I have recently graduated college and use my debit card sparingly. Every few days or so I check my BOA account and see a notice of how much I have saved this month on Keep the Change. The reality of it is that the money I have 'saved' was just money transfered from my checking to the savings. On top of that the bank takes out a $3.00 US fee every month to run this service.

In essence, I lose $3.00 a month just to have my money brought from one account to another. I read above that someone mentioned BOA will match 5% of your savings. If that 5% match is not over $3.00 (meaning you didn't save more then $60.00 a month in your Keep the Change account) you just lost money.

Here is what I thought - Whatever you charge (let's say $5.50, the bank rounds it up to $6.00 and give's you the remaining 50 cents.

Here is what happens. You charge $5.50, the bank rounds it up to %6.00, and gives you the 50 cents...from your own account! So their not giving you extra money. Their just giving you your own money!...which you can't get til a year later lol. Sure your having a savings...but it's just transfering your cash.

The good thing is for the first three months they match everything you save, so if you save lets say $60.00 after adding all the change, they'll match that with another $60.00 now (or at least that is what I think so don't depend on me because I could be wrong then). So it's ok if you do this anyway. But if you don't, then I don't think it's that good then. Maybe for the first three months. But after that they match about 5% and then I think they won't go past $250. So once again if something is to good to be true it just might be then .

Uh, yeah, Bobby - no one was under the impression that the bank was giving you money with every transaction. They were simply putting the remainder into your savings account, where it was immediately available for you to use should you need it. They did match up to a certain amount, and THAT money, you couldn't get at for a year. So, they did give you some free money, but that wasn't the point - the point was that you could save money without trying to - automatic deductions from your checking account were put into your savings account, and at the end of a couple of months, you might have a couple of hundred bucks saved.

I've since withdrawn from Keep the Change - I was never charged any fees for it, but I found it difficult to balance my checkbook with the constant transferring of funds from one account to another. Also, I'm much less pleased with Bank of America than I used to be.

Dave #22

Initially "Keep the Change" seemed like a great idea. But I didn't use my BoA debit card much and the Regular Savings account they linked to it went largely ignored. I also failed to read the fine print: if you fail to meet certain criteria (not transferring $25/mo into the account, etc) they assess $5/mo fee to your "savings account." Of course this schedule of fees is not disclosed to you up front. So essentially BoA ends up siphoning your change in their coffers through assessing this "Maintenance nce" fee. When I tried to close the account, they would not refund the assessed fees. Looks like BoA kept my change instead!!!

During the Introductory period Keep the Change seems like a great way to pocket some cash. Thereafter, it's not such a great deal. Do the math: you can earn up to 5% cash back with the maximum of $250 dollars. $250 dollars is 5% of $5000. That means in order to earn $250 annually (outside of the promotion period) you would need to perform, at the minimum, 5000 debit transactions where the balance ended in ".00" and $1.00 was transferred through Keep the Change to your "savings" account each time. Of course the actual amount transferred to your account varies significantly (between 1 and 100 cents) and is usually much less than $1, so you can imagine how many annual transactions one would have to perform to actually accrue a substantial amount of money!

I signed up on Friday. By Saturday, I had made several purchases with my check card. I checked my acct. oline. Although I was clearly enrolled in Keep The Change--none of the purchase amounts had been rounded up. So, I contacted a B of A representative online.

This is amazing, the rep told me that, yes I was enrolled and on Monday or Tuesday--the "change" would be put into my savings accout. I mentioned that the amounts had not been rounded off in my checking account (I was looking at it online) and the rep. said, they wont be. On Monday or Tuesday, they will calculate the TOTAL amount of change resulting from the purchases, subtract that whole amount from my checking and move it to the savings side of my account. This sounds like a nightmare to track and balance. Im hoping the rep. has misunderstood the process.

This seems to be the same thing now (2015). It makes me unsure that they are actually giving me any benefit with the Keep the Change service. It just looks like subtracting more money from my checking account, especially since their website says that if there isn't enough money in my account, they won't round up the change

Guest #25

I had the BoA promotion for about a few months, and for the first couple of months things were fine. However, soon after I started noticing the $3 monthly maintenance fee. Typical BoA scam. I was basically being charged for moving my money around. Lesson learned.

Couldn't I just sign up for the program (assuming I keep a decent checking balance), go to the gas station, pump about .01 cent of gas in my car repeatedly for 253 straight transactions. If I average .02 cents of gas per fill up, this would take 256 transactions at the pump and so on. This would allow me to capitalize on the free $250 that BofA would allow during their promotion and then quit the program. I would have to keep 250 dollars in my checking account so I wouldn't overdraft. I'd have to read the fine print (# of transactions, quitting the program, etc). Maybe I can scam BofA for once!!!

This promo is not worth risking use of a Debit Card. identity theft is rampant and the last thing you want is to be using your debit card extensively. if the money is stolen, you wont have it for a long time.

and the worst part is the 5% matching after the first 3 months. so the $70 you are talking about would be matched by just $3.5 after the first 3 months. but the bank actually makes 1% interchange fee from the merchants for every $1 you spend. which means say you spend $4.99 . the bank makes 5Cents. but only matches 5% of 1 cent to you.

you should learn more about how banks work before endorsing products. there is no free meal. .. and this one is actually a free meal to BOA not us.